The employees in Small Business Health Options Program (SHOP) exchange plans may not get as many carrier choices as expected when the exchange system starts up Jan. 1, 2014.
The U.S. Department of Health and Human Services (HHS) has proposed regulations (CMS-9964-P2) that could put off the day when SHOP small group exchange users get to choose from a smorgasbord of coverage offerings to Jan. 1, 2015, from Jan. 1, 2014.
Originally, HHS was going to require all SHOP exchanges to offer a smorgasbord option Jan. 1, 2014.
Now, state-run SHOP exchanges can start off using the smorgasbord approach in 2014 if they want.
The other state-run SHOP exchanges can wait until 2015 to offer a smorgasbord option, and all of the “federally facilitated exchanges” run by HHS will wait until 2015 to offer the smorgasbord option, officials said in a preamble to the proposed regulations.
The SHOP exchanges
If the Patient Protection and Affordable Care Act of 2010 (PPACA) takes effect as written and works as expected, it is supposed to require residents of all 50 states and the District of Columbia to have access to exchanges, or Web-based health insurance supermarkets, for individuals and small groups by Oct. 1.
States will run the exchanges in some states. HHS will run, or help run, the exchanges in most states.
PPACA also is set to require issuers of all non-grandfathered individual and small group coverage to cover a standard “essential health benefits” (EHB) benefits package, or the equivalent, and to sell plans that fit into one of four different “metal levels” of coverage.
A bronze level plan would have to cover about 60 percent of the actuarial value of the EHB package. The EHB actuarial value percentages would be about 70 percent for a silver plan, about 80 percent for a gold plan and about 90 percent for a platinum plan.
HHS officials originally had proposed that each SHOP exchange should give workers as many coverage choices as possible by offering employers a smorgasbord coverage menu option.
An employer that picked the smorgasbord option would simply choose whether to offer bronze, silver, gold or platinum coverage.
Workers could then choose any plan in that metal level offered through the SHOP exchange.
If, for example, an employer chose to offer gold-level SHOP exchange smorgasbord coverage, the worker could choose any gold-level plan sold through the exchange.
A few commenters wanted HHS to write SHOP exchange plan regulations that would maximize employees’ access to a long list of coverage choices from the start, HHS officials reported.
But HHS found that many commenters were not sure whether insurers could really handle the administrative tasks associated with an employee choice program, officials said.
Commenters also were not sure whether there would be time to educate brokers, let alone employers and employee, about an employee-choice program, officials said.
“The commenters stated that issuer efforts to prepare and price [qualified health plans] for an employee choice environment and to make the systems and operational changes required for SHOP enrollment and premium aggregation could compete with efforts to prepare for participation in the exchange,” officials said.
Giving SHOP exchanges an extra year to add the smorgasbord option should give everyone more time to adapt to the new approach, officials said.
Similarly, HHS officials have proposed pushing back mandatory implementation of SHOP premium aggregation function requirements for a year.
In another provision, officials have proposed shortening the “special enrollment” period for workers who go through a major change in life, such as marriage or the birth of a dependent, to 30 days, from 60 days, to make the length of the SHOP program special enrollment period the same as the special enrollment period provided by the Health Insurance Portability and Accountability Act (HIPAA) outside the SHOP system.